Purpose — For corporations seeking to boost market share or gain valuable assets, compelling turnaround opportunities seem to abound. In this paper the authors, who are veteran turnaround analysts, aim to share their experiences.
Design/methodology/approach — With so many distressed companies in need of turnaround talent and money, the paper presents lessons learned over the years by veteran specialists, which investors would be well advised to reflect on the before they leap into a thorny acquisition.
Findings — Within the middle group of stumbling companies are some genuine turnaround opportunities, despite the fact that they have been beaten down by the market and have performance problems that do not have obvious solutions.
Practical implications — Distressed companies fall into three categories: hopeless situations that no amount of time, money or effort can save; obvious winners that will revive as the current credit freeze thaws; and problematical situations that require a careful due diligence process to sort the lackluster survivors from those businesses that will best respond to skilled turnaround management. Only the last category offers compelling high returns that justify the resources committed.
Originality/value — The paper warns not to be seduced into trying to save a company that will limp along for years on life support systems or provide only negligible returns. Also to be brutally realistic about what the future could look like for a struggling firm and only put energy into potential winners and not into lackluster survivors.